She was one of seven children of Ernest Richard Lawrence, a farmer, and his wife Mary Norma (née Watson).

From the age of six she was educated at various Roman Catholic boarding schools: Marian Convent at Morawa; Dominican Ladies College at Dongara and Santa Maria College at Attadale from which she matriculated in 1964 with distinctions in six subjects, a General Exhibition for Academic Achievement and a Special Subject Exhibition in economics. Describing her childhood as a "conventional Christian upbringing", Lawrence has stated she does not follow any particular religion and has no belief in a deity.[1]

In 1965, Lawrence enrolled at the University of Western Australia in Perth. In 1968 she graduated as a Bachelor of Psychology with First Class Honours, having won five prizes including that for the most outstanding graduate throughout the Faculties of Arts, Economics and Commerce, Law, Architecture and Education. In 1968 she was Senior Student in Saint Catherine's residential college.

She was politically active from an early stage. While at UWA she lobbied, successfully, to have the Campus Beauty Contest abolished. In Melbourne in the early 1970s she helped to found the Victorian Branch of the Women's Electoral Lobby.[2]

She tutored at the University of Melbourne in 1971 and 1972, tutored and lectured at the Western Australian Institute of Technology (WAIT) from 1973 to 1978 and was a lecturer with the Faculty of Medicine at the University of Western Australia from 1979 until 1983. During this period she continued with post-graduate research, having won two scholarships for PhD studies in psychology, and received the doctoral degree in 1983, for her dissertation Maternal Responses to Infant Crying.

During this period, Lawrence joined the Labor Party. She unsuccessfully contested the seat of East Melville at the 1983 election against sitting Liberal Party member Antony Trethowan, but was more successful in 1986 when she won the seat of Subiaco following the retirement of long-serving Liberal-turned-independent Dr Tom Dadour. In 1988, following the sudden departure of Brian Burke as Premier, she was appointed Minister for Education. At the 1989 election, her seat of Subiaco was abolished in a redistribution, and she won the new seat of Glendalough.

The Western Australian Labor government was in a state of crisis as a result of corruption allegations against the cabinets of two successive premiers, Brian Burke and Peter Dowding, the so-called "WA Inc" period.

In February 1990, Dowding was forced by his colleagues to resign. Lawrence, a prominent opponent within the Labor Party of Brian Burke's Right faction, of which Dowding was a member, replaced him as Premier on 12 February 1990.

Carmen Lawrence was the first female Premier of an Australian State. However, she was not the first female head of government of a province of the Commonwealth of Australia; being preceded by Rosemary Follett, who became Chief Minister of the ACT on 11 May 1989.

On 19 November 1990, Lawrence called a Royal Commission into matters related to the WA Inc deals, after considerable public and media pressure. The commission hearings began on 12 March 1991, and within months, the Labor party became a minority government as three left-wing MPs left the party to sit as independents. Coverage of the commission hearings dominated media headlines for most of the period from then until the 1993 election.

Two significant matters which characterised Lawrence's premiership were a public demand for a strong legislative response to juvenile crime and problematic investments in public transport infrastructure.

Between mid-1990 and early 1992, a number of high-speed chases involving cars stolen by repeat juvenile offenders resulted in the deaths of 10 people, including a businessman and several young parents. All received considerable media attention, most notably from 6PR's Howard Sattler. On 25 December 1991, 22-year-old Margaret Blurton and her infant son Shane were killed in a crash involving Billy-Jean Abrahams, a 14-year-old aboriginal offender in a stolen motor vehicle.[5] Margaret's husband Peter survived, and gained public sympathy through bedside interviews to print and electronic media. A candlelight vigil was organised outside Parliament House on 4 January 1992, and exactly a month later, responding directly to the public call for action, Lawrence and deputy leader Ian Taylor tabled the Crime (Serious and Repeat Offenders) Sentencing Bill 1992,[6] which was rushed through parliament despite the advice of a committee that it was "unworkable and unsustainable". Peter Blurton established the Margaret and Shane Foundation to channel both his own grief and the immense public sympathy into a workable force to fight for the rights of crime victims. The law, however, turned out to be defective and Lawrence later declared it to have been a mistake.[7] The Act was repealed in June 1994.

The other matter which preoccupied the Government was the ongoing construction of the Northern Suburbs Transit System, later to be known as the Joondalup railway line, which proceeded throughout Lawrence's term as Premier. She officially opened the line on 20 December 1992 and travelled on it with community leaders and selected members of the public, but the line was not opened for regular services until 21 March 1993. The Perth City Busport (now known as the Esplanade Busport), was opened on 30 November 1991 in an effort to centralise services travelling through the central business district—however, due to its distance from St Georges Terrace, it was branded a "white elephant" by the media and failed to significantly impact on CBD traffic. However, the station is still in use, and has since been integrated into the rail network following the opening of the Mandurah railway line in December 2007.

On 5 November 1992, a petition was tabled in the Legislative Council by Labor MLC John Halden which contained an allegation that the Opposition LeaderRichard Court had leaked confidential information to a party in a divorce case. The petitioner was Brian Mahon Easton, a former Western Australian public servant. The alleged recipient of the leaked information was his former wife, Penny Easton. On 9 November 1992, she committed suicide. In Parliament on the following day, in response to an Opposition question, Lawrence denied prior knowledge of the petition. This episode subsequently became known as the "Easton affair".

In the election held on 6 February 1993, the Lawrence government was defeated by the Liberal-National coalition and Richard Court, who had replaced Barry MacKinnon as opposition leader just a year earlier, became Premier. Lawrence remained as Opposition Leader until early 1994.

In December 1993, Carmen Lawrence, Jim McGinty and Geoff Gallop joined in a petition to the High Court of Australia to challenge the franchise system for the Western Australian Legislative Council. The system of vote-weighting tended to favour the conservative parties and was a long-term obstacle to the ALP gaining control of the Council. On 20 February 1996, the High Court rejected the challenge on the basis that the law was not unconstitutional.[8]

In May 1995, Premier Court requested the establishment of a Royal Commission to determine the circumstances of the tabling of the Easton affair petition. On 14 November 1995, the Royal Commission released a report which found that Lawrence had misled the Western Australian Parliament concerning her knowledge of and role in the tabling of the petition. Paul Keating denounced the Commission as a political stunt and accused the Commissioner, Kenneth Marks QC, of bias.

At the 1996 federal election, the Keating government lost office and, following Paul Keating's resignation of the leadership, Kim Beazley, a Western Australian, became the new Leader of the Opposition.

Lawrence was appointed to the Opposition frontbench as Shadow Environment Minister. On 21 February 1997, she was charged with three counts of perjury resulting from the findings of the Marks Royal Commission. She stood down from the shadow ministry pending her trial. She was acquitted on 23 July 1999.

In September 2000 Beazley approved her reappointment to the Labor frontbench, and appointed her shadow minister for Aboriginal and Torres Strait Islander Affairs, the Arts and Status of Women.

During the 2001 federal election campaign, Lawrence strongly disapproved of Beazley's support for the government's policy of detaining asylum-seekers (see Tampa affair). In December 2002 she resigned from the Shadow Cabinet, describing the party's policies on asylum and immigration as "brutal and inhumane".[9]

During 2002 the Labor Party approved a series of reforms proposed by new Opposition leader Simon Crean, among them the direct election of the party's National President by the party membership (the post had previously been filled by election at the party's National Conference) and a reduction of the union's representation at party conferences from 60% to 50%. Lawrence emerged as the candidate of the party's Left faction for the post, and the election took place in November 2003. Although she did not win an absolute majority of the votes, Lawrence topped the poll and was elected President, taking office on 1 January 2004, shortly after Mark Latham succeeded Crean as party Leader. She used the position to campaign in favour of a policy of better treatment for asylum-seekers entering Australia.[11] Her term as National President ended on 1 January 2005, when she was succeeded by Barry Jones.

As foreshadowed in her announcement of March 2007, Lawrence did not contest the federal election held on 24 November 2007, thereby retiring from Parliament. She was succeeded as Member for Fremantle by Melissa Parke, also of the ALP.

Following her departure from the federal Parliament, Lawrence was engaged for a term, in 2008, as a Professorial Fellow at the University of Western Australia. Her brief was to conduct collaborative research with a focus on the origins of fanaticism and extreme behaviour, including terrorism, under the auspices of the University's Institute of Advanced Studies.[12]

In 2005 she spoke in the Eminent Lecturer Series for the Herbert and Valmae Freilich Foundation which is hosted by the Australian National University. Her lectures on the theme Fear and Public Policy have since been published as a book titled Fear and Politics (listed in Publications section, below).[17]